On the eve of Google’s acquisition of YouTube in 2006, the video site’s cofounder Chad Hurley discovered that a Google ad manager had snooped on YouTube’s revenue figures. Hurley was so irked by the invasion of YouTube’s business that he threatened to walk away from the deal, a new book about YouTube’s founding reveals.
Google’s CEO at the time, Eric Schmidt, was able to calm Hurley down enough to close the $1.65 billion deal — a deal that became a pivot point in the development of the modern internet. The previously unreported episode comes from the book “Like, Comment, Subscribe: Inside YouTube’s Chaotic Rise to World Domination” by the Bloomberg reporter Mark Bergen.
Within a year of its founding in 2005, YouTube had become a hot commodity, with traffic and freshly uploaded content surging. Throughout 2006, Yahoo and Google courted Hurley and the site’s other cofounder Steve Chen. The book says the cofounders had even met Yahoo and Google’s executives on different days at the same Denny’s near YouTube’s offices in San Mateo, California.
Over the course of the year, Hurley and Chen got Google to increase its offer to $650 million from $50 million and, finally, to the eventual $1.65 billion deal.
Schmidt also asked Hurley and Chen to upload a video to YouTube announcing the acquisition — a now-infamous low-resolution video that lives on the site to this day.
Before the deal, Google tried to take out YouTube by launching a competitive video-hosting platform, Google Video, which was led by Susan Wojcicki, one of Google’s first employees, who is now YouTube’s CEO. The search giant pulled out all the stops to make Google Video a success, even linking to it on the Google.com search homepage. But the gambit failed, Bergen wrote, and YouTube continued to trounce Google Video in traffic.
After the deal was struck, Schmidt told employees at Google Video’s Mountain View, California, campus that they should pack up and join the YouTube team in their new offices just south of San Francisco in San Bruno, the book said.
Are you a YouTube employee or someone with insight to share? Contact Tom Dotan at tdotan@insider.com or on Twitter at @cityofthetown.
Keep reading
For you